A Legal and Logistical Playbook for Global Expansion Success, with Expert Legal Insight From Addleshaw Goddard

Expansion to New Countries Requires Businesses to Carefully Consider Logistics and Legal Details

Global manufacturers are making bold moves. Fueled by shifting tariffs, geopolitical uncertainty, and a push for more resilient supply chains, many are expanding beyond China to set up operations in Southeast Asia, India, Mexico, and other parts of the Americas.

According to the American Chamber of Commerce in China, 30% of US companies manufacturing in China have either considered or begun relocating parts of their operations — with Southeast Asia and India leading the list of alternatives. A similar survey of European firms found that 40% were also making or considering the same shift. Rather than exiting China altogether, many companies have maintained or expanded domestic production for Chinese consumers while building bifurcated supply chains to serve customers in other regions — including Southeast Asia, Mexico, Poland, and Hungary.

Mexico is also gaining attention, particularly among Chinese manufacturers exploring nearshoring strategies that take advantage of the IMMEX program to avoid duties and taxes when importing into the US. In parallel, some companies are evaluating opportunities under USMCA and exploring tariff engineering — redesigning products to legally qualify for reduced duties.

For the largest global companies, these moves come with significant planning resources and dedicated legal and logistics teams. Mid-sized manufacturers often don’t have that luxury. Yet they face the same barriers — legal red tape, regulatory hurdles, infrastructure gaps, and uncertainty around how supply chains will perform in the new location.

This eBook is a practical guide for companies preparing to expand globally. In section one, we look at logistics: how to evaluate infrastructure, mitigate customs delays, plan for labor needs, and ensure your supply chain can support business growth. In section two, we outline the key regulatory and compliance considerations — from legal entity setup and employment law to intellectual property and dispute resolution.

The goal? To help your team avoid common missteps, prepare effectively, and make informed, grounded decisions about where to expand and how to make it work, with expert advice where needed.

The Logistics Implications of Global Expansion

Is It Easy to Do Business in Your Target Market?

What to assess: Customs processes, licensing, documentation requirements, infrastructure, and how local policies are actually applied.

Doing business abroad means adapting to a new set of rules — and those rules aren’t always clear. For example, when a tech appliance company moved production to Malaysia, they ran into customs issues that disrupted shipments over a handful of missing screws. The local regulations were strict and inflexible, even on minor numerical discrepancies. These types of bureaucratic roadblocks can paralyze operations without the right local support.

Countries like India and Vietnam are increasingly attractive for cost and policy reasons — think “Make in India” incentives or tariff benefits on US-bound goods — but their regulatory complexity adds risk. In India, for instance, a company importing under HS Code 8471 must secure a special import license. If the entity buying from abroad is related to the overseas parent, an SVB (Special Valuation Branch) license is also needed to satisfy customs that the transaction pricing is arms-length.

Compliance interpretations can even vary regionally. In Vietnam, local customs offices have the final say, and practices differ from one province to another. It’s not uncommon for one shipment to clear without issue in one region but get flagged in another.

Best Practice: Success in a new market depends on more than just clearing customs. It requires a logistics partner that understands how things actually operate — from regulatory nuances and licensing requirements to infrastructure limitations and local business culture. Look for partners with AEO (Authorized Economic Operator) status, which signals secure, compliant supply chain practices, and more importantly, choose teams that have established, working relationships with local customs officials, licensing authorities, and government agencies.

For example, when a global memory products manufacturer was unable to establish distribution in Singapore due to registration requirements, Dimerco stepped in as the appointed agent. By working directly with Singapore’s Inland Revenue Authority, Dimerco helped the company meet legal conditions for market entry — unlocking immediate access to the region.

In India, Dimerco supported a tech company entering the market under the “Make in India” initiative. The company needed help obtaining two critical licenses: one for importing under HS Code 8471, and another — an SVB license — due to the relationship between the Indian branch and the foreign parent company. Dimerco coordinated weekly calls, navigated Indian compliance, and helped secure the licenses required to begin operations.

In Malaysia, Dimerco advised a solar equipment manufacturer moving from China on local duties, free trade zone usage, and compliance rules. With these aligned early, the company was able to switch production locations without losing customers or missing delivery windows.

What these cases have in common is hands-on, on-the-ground support — not just theoretical knowledge. When your partner knows how things actually work in that market, you don’t just avoid delays — you gain the ability to adapt in real time.

Are You Prepared for Trade Compliance Complexities?

What to assess: HS code accuracy, valuation, country of origin, documentation, and audit risk.

Trade compliance missteps don’t just cause delays — they put your entire supply chain at risk. From misclassified goods to incorrect declarations of origin, small errors can result in inspections, fines, lost shipments, or even debarment from importing altogether.

One Dimerco customer, a Chinese manufacturer, contacted the team after running into issues with US tariffs. Their strategy was to ship finished products through Vietnam and then on to US customers, hoping to avoid China-origin duties. But they had no manufacturing or value-added processes in Vietnam — only repackaging and transshipment. US Customs and Border Protection (CBP) didn’t accept this as a valid change in country of origin, because no “substantial transformation” took place. Despite good intentions, the company’s plan ran afoul of strict CBP rules.

Misinterpreting the definition of country of origin is a common mistake. Under US regulations, a product’s origin is the country where it was manufactured or underwent a fundamental transformation — not necessarily where it was shipped from. Reassembly or cosmetic changes, like adding a label or packaging, rarely qualify. Similarly, valuation errors often stem from omitting “assists” like free tooling or product design, which customs considers part of the true transaction value.

Another area gaining traction, especially under the USMCA, is tariff engineering: designing or modifying a product in a way that legally qualifies it for a lower duty rate. One electronics company recently acquired a plant near the US–Mexico border to support its “America First” market strategy. As part of that move, the company is actively exploring tariff engineering opportunities and leveraging the IMMEX program to import duty-free into the US from Mexico. For companies with a growing US footprint, these strategies are becoming essential to cost structure and compliance planning.

Best Practice: Align with a trade compliance advisor early. Build internal awareness around the four data elements customs cares most about: HS code, declared value, origin, and quantity. When in doubt, assume customs will audit your assumptions.

To reduce risk and improve predictability, many companies pursue certifications like CTPAT (Customs Trade Partnership Against Terrorism). CTPAT members are less likely to face inspections, have faster customs clearance, and get direct access to CBP support.

Ultimately, trade compliance is not just a back-office function — it’s central to your ability to maintain a consistent supply chain, avoid costly disruptions, and stay on the right side of increasingly complex international regulations.

Will Freight Capacity in the New Market Meet Your Needs?

What to assess: Port capabilities and freight capacity, direct service availability of direct air cargo routing, alternate routing options, and multi-mode strategies.

Freight capacity varies drastically across markets. When one heating equipment maker relocated from Southern China to Penang, Malaysia, they were surprised to learn that outbound air capacity from Penang was just a fraction of what they’d relied on in Hong Kong. Delays loomed — until their 3PL helped them reroute cargo through Kuala Lumpur and Singapore.

A tech manufacturer weighing a move to Vietnam ultimately backed out because they couldn’t secure reliable freight lanes. Both air and ocean capacity were constrained, with longer transit times and less frequent service to key global markets.

Best Practice: Before committing to a location, pressure-test freight availability. If local ports are limited, explore road and air or transshipment options using neighboring hubs. A 3PL with strong relationships and flexible routing models can often unlock solutions a static plan cannot.

How Will the Move Affect Transit Times?

What to assess: Distance to customers, port congestion, availability of direct cargo routing, and maturity of the local transport infrastructure.

Transit time isn’t only about how far a shipment travels. It’s shaped by factors like port efficiency, flight and vessel schedules, transshipment requirements, and congestion. When shifting operations to a new country, it’s essential to understand how these variables will affect your “order-to-delivery” window.

One technology manufacturer, when assessing the implications of a move from China to Vietnam, discovered major logistical challenges — most notably, significantly longer transit times. Vietnam’s logistics infrastructure, while growing, didn’t match the maturity of China’s. Both air and ocean capacity were limited. Direct flights to the US and Europe were few and often required routing through third countries, adding three to four days to delivery timelines. On the ocean side, Vietnam’s ports had fewer deep-water berths and more congestion, causing further delays.

The result? Projected lead times nearly doubled. This level of disruption posed a serious risk to customer delivery commitments, and ultimately, the company abandoned plans to shift sourcing to Vietnam, opting instead for a location with proven transit performance and more predictable service levels.

Transit data backs up this caution. Port-to-port comparisons show meaningful differences in travel times:

• Hanoi to Los Angeles by ocean: ~24 days
• Hong Kong to Los Angeles by ocean: ~18 days
• Hanoi to New York by air: 4 days
• Hong Kong to New York by air: 2 days

Best Practice: Evaluate whether your new supply chain can support your current service levels. Work with a freight partner to map likely transit times, not just from origin to destination, but through real-world routings. Understand whether long-haul service is direct or requires transshipment, and build those delays into your planning.

Can the Local Warehousing Infrastructure Support Your Business?

What to assess: Warehouse capacity, tech systems, bonded/FTZ capabilities, and scalability.

Warehousing is often overlooked during global expansion, until it causes problems. One apparel company relocating from China to Malaysia assumed warehouse space would be readily available. It wasn’t. The limited capacity near their new factory site caused delays and increased storage costs, and left no room to grow.

In many Asia-Pac markets, the warehouse environment is still catching up to the pace of industrial growth. Facilities may lack key features like racking, temperature control, scanning and WMS integrations, or even reliable power infrastructure to support automation. These gaps create inefficiencies that compound as volume increases.

In contrast, Thailand has become a reliable warehousing hub for companies expanding across Southeast Asia. Dimerco supports customers in Thailand with integrated FTZ and customs solutions designed to help reduce cost and complexity.

Challenge: One manufacturer in Thailand needed to lower import costs and improve inventory handling without compromising speed to market.

Solution: Dimerco set up an FTZ arrangement and provided bonded warehousing with value-added services including quality inspections, relabeling, and repacking. By combining FTZ benefits with localized support, the company avoided unnecessary duties and gained greater control over inventory staging and compliance.

Thailand’s warehouse infrastructure is well-positioned to address the gaps often seen in markets like Vietnam or India. Facilities offer strong capabilities including temperature-controlled zones, bonded storage areas, and advanced handling for eCommerce or regional distribution. These options allow companies to tap into local or regional fulfillment while managing regulatory requirements and service level expectations.

For companies entering the US, warehouse-related complexities can take a different form — especially when FTZs are involved. One manufacturer preparing to open a new production site in Dallas, Texas, engaged Dimerco to support the full scope of their FTZ setup. This included coordinating the application and documentation process, managing customs entry filing and CBP communications, and connecting the client with experienced legal and compliance advisors. Dimerco’s ability to provide end-to-end support — from regulatory navigation to physical warehousing and brokerage — was critical in laying the groundwork for a compliant and cost-efficient launch.

Dimerco has seen a rise in companies seeking warehousing solutions that go beyond simple storage. Many now require bonded or FTZ space, advanced inventory visibility, integration with production lines, and scalability to support regional distribution or eCommerce fulfillment. In Southeast Asia, our teams are helping clients identify facilities with strong power and structural specs to support mechanization — including warehouse roofs that can accommodate solar panels for cost and ESG advantages.

Best Practice: Define your warehousing requirements early, and don’t assume local infrastructure will match your existing standards. If you need bonded status, FTZ access, or automation-ready space, perform a site selection analysis based on clear operational criteria. Engage a logistics partner that can vet warehouses, support customs compliance, and integrate value-added services such as labeling, kitting, or cross-border eCommerce handling.

Will the Local Workforce Meet Your Productivity and Skills Requirements?

What to assess: Labor availability, productivity norms, cultural factors, and worker productivity.

Labor is more than a headcount. It’s about how much output you get per worker, and that varies widely. One semiconductor supplier doubled its headcount after relocating to Malaysia. More holidays, shorter workdays, and lower automation maturity all contributed to reduced per-person output.

Northern Vietnam offers competitive labor rates, but major companies report difficulty sourcing skilled workers, especially for logistics and technical roles.

Best Practice: Factor in not just wage levels but also work culture, management talent, and recruitment pipelines. Build a realistic labor cost model that includes time, training, and the local learning curve.

Can You Rebuild Your Inbound Supply Chain?

What to assess: Local supplier availability, packaging and component sourcing, and supplier willingness to relocate.

When you move production, your supplier ecosystem doesn’t automatically move with you, and that’s where companies often stumble. One electronics firm relocated operations out of China with the understanding that its key suppliers would follow. But when the COVID-19 pandemic hit, those relocation plans were shelved. The company was left scrambling, forced to ship packaging and critical components from China. Costs spiked, timelines slipped, and the local operation became dependent on long-distance inputs — exactly what the move was meant to reduce.

India’s smartphone manufacturers faced a similar reality. While local assembly surged, more than 40% of key components still came from China. When Chinese factories shut down during lockdowns, Indian production lines went quiet, underscoring how a partially built supply chain can collapse under pressure.

Avoiding this outcome requires more than a handshake agreement with your vendors. Before relocation, evaluate the availability of key materials in the new region. Can you source locally at the scale you’ll need? Are your suppliers truly capable, and willing, to support you in a new geography? If not, consider alternatives like building up inventory, negotiating co-location agreements, or securing warehouse space to receive imported parts. Even elements like packaging need to be accounted for early — one manufacturer in Malaysia faced high costs and delays simply because local packaging wasn’t lined up in advance.

Best practice: Don’t just focus on outbound freight and final delivery. Take the time to ensure your inbound supply lines are ready before the first shipment leaves the factory floor. The most common and costly disruptions happen when companies assume they can replicate their current supplier relationships in a new country without first validating that they can.

The Legal and Regulatory Implications of Global Expansion

In the context of global logistics, failing to adequately research and understand the legal and regulatory requirements of a new market or jurisdiction can create significant barriers to successful expansion or entry. Each country has its own (sometimes very complex) framework of laws governing areas such as customs procedures, import/export restrictions, taxation, product standards, and employment regulations. Poor preparation in navigating these requirements can lead to delays in supply chain operations, penalties for non-compliance, and even the seizure of goods.

Let’s dive into the relevant legal questions you should be asking as you implement your global expansion plans.

What Are the Relevant Foreign Ownership Requirements?

What to assess: potential foreign ownership restrictions, ownership structures available to foreign owners, and licenses for warehousing and transportation.

Foreign ownership restrictions and specific licenses can vary significantly from jurisdiction to jurisdiction and across different sectors. These restrictions can impact your ability to operate and grow in the target market. India, for example, has certain sectoral limits in place in relation to foreign ownership and has announced that there may be further tightening of those limits. Indonesia has the Negative Investment List which sets out which types of businesses can or cannot be funded by investors, and whether those investors can be foreign or domestic. Canada has restrictions under the  Investment Canada Act (ICA), which requires foreign investors to undergo a review process if their investment exceeds certain monetary thresholds. Further, specific licenses may be required depending on the nature of your activities. In Malaysia, for example, different warehousing licenses come with varying ownership requirements and immigration procedures for workers.

Properly assessing these risks is critical to a smooth expansion.

Best practice:

• Research the ownership structures available to foreign investors. Consider the implications of majority versus minority ownership.
• Analyze specific licensing and ownership requirements for logistics activities in your target market, such as warehousing, transportation, and customs clearance.
• Engage local expertise. These local legal advisors can ensure compliance with foreign ownership requirements and determine whether joint ventures or alternative legal structures are appropriate for your business objectives.

By taking these steps, you can mitigate risks and position your supply chain for sustainable growth in new jurisdictions.

What Packaging Requirements May Be Relevant?

What to assess: cross-border packaging requirements, relevant environmental laws and applicable ESG due diligence.

Expanding across borders presents unique challenges when it comes to packaging and environmental compliance. Regulations can vary widely between countries, requiring a detailed understanding of:

• Packaging Requirements: From material restrictions to labeling standards and customs/import rules, compliance with destination-country regulations is essential. For example, the  EU Packaging and Packaging Waste Directive (94/62/EC)  sets strict requirements for packaging materials to reduce waste and promote recycling. Packaging must meet “essential requirements,” including minimizsing weight and volume, ensuring reusability or recyclability, and limiting hazardous substances such as heavy metals (e.g., lead, cadmium, mercury, and hexavalent chromium). Australia has implemented the  Australian Packaging Covenant (APC), a voluntary agreement between government, industry, and community groups to reduce the environmental impact of packaging. If you don’t adapt your packaging to adhere to local regulations, it can result in fines or restrictions on market access.
• Environmental Laws: Carbon emission targets, waste management rules, and export packaging standards can impose operational restrictions that need careful planning. For example, Japan has implemented the Containers and Packaging Recycling Act which, in part, mandates responsible waste management by businesses. Vietnam is further harmonizsing its laws with international rules and practices.
• ESG Compliance: As ESG due diligence becomes a strategic priority in certain jurisdictions, non-compliance with ESG regulations or regulatory divergence can lead to serious consequences, including contractual breaches or terminations, as well as regulatory fines and scrutiny, and reputational damage.

Best practice:

• Engage legal expertise from the start to ensure full compliance with packaging and ESG regulations, as well as environmental laws. Legal advice should assist you across multiple markets to ensure you have a compliant, efficient process that can work across numerous jurisdictions.
• Prioritize ESG compliance. Where necessary, conduct environmental impact assessments and adopt sustainable practices. Understand the relevant ESG regulatory framework in your target markets and ensure adherence to avoid legal and reputational risks. Legal advisors can provide essential guidance to navigate these complexities.

By proactively addressing these packaging considerations, you can strengthen your cross-border supply chains to align with evolving regulatory and sustainability expectations.

What Legal Considerations Might Impact Your Ability to Hire and Keep Adequate Labor for Your Expanding Business?

What to assess: local employment laws, foreign-to-local employee ratios, as well as the process, timeframes and costs for relevant visas.

Employment laws differ significantly across jurisdictions, and non-compliance can disrupt operations and lead to penalties, as well as contribute significantly to reputational damage and disruptions in the workplace.

From the start, key risks to consider include:

• Foreign-to-Local Employee Ratios: Many countries impose quotas on this ratio. For instance, Thailand currently enforces a 4:1 ratio of Thai nationals to foreign workers, while Singapore currently applies sector-specific foreign worker quotas, particularly in industries like transport, storage, and communications. Indonesia has implemented the Labor Law which, among other things, requires employers to obtain a Foreign Worker Utilization Plan before hiring foreign workers. Indonesia also requires training for Indonesian workers to ensure knowledge and technology transfer.
• Work authorizations and Taxation: Your team must also understand the requirements for business visas, work permits, taxation, and the necessary documentation to ensure compliance when hiring foreign employees.

Best practice:

Seek tailored legal advice to understand local employment laws, including quotas, working hours, and minimum wage requirements, as they relate to your business operations. Also, develop a workforce strategy that balances operational needs with local legal requirements, ensuring your hiring practices align with the regulatory framework.

By addressing these considerations early, you will be in a better position to build a compliant and sustainable workforce in your new markets.

What Taxation and Customs Compliance Factors Apply?

What to assess: local tax regimes, customs principles, and the relevant costs.

Tax and customs regulations can have a significant impact on your cost structure and operational efficiency. Key considerations include:

• Taxes: Local tax regimes, such as VAT, corporate income tax, and import/export duties, vary widely and can affect profitability. For instance, Thailand currently applies a 7% VAT on all imports, even for small parcels.
• Customs Compliance: Local requirements for packaging and shipping must be carefully considered to avoid delays or additional costs at customs. India, for example, can require country-of-origin labeling for certain products.

Best practice:

Engage expert tax and legal advisors in your new market to understand your obligations, ensure compliance with local tax regimes, and optimize customs processes. Also, identify potential tax incentives that could benefit your business, while prioritizing full compliance to avoid costly penalties.

By proactively managing tax and customs requirements, you’ll minimize risks, control costs, and streamline global operations.

What are Key Intellectual Property (IP) Protection and Data Laws?

What to assess: IP regulations applicable to your product(s) and the processes for registering the appropriate trademarks, patents and copyrights.

Expanding into new jurisdictions exposes businesses to varying levels of risk when it comes to intellectual property (IP) and data protection. Key risks include:

• Divergent IP Laws: IP laws and enforcement mechanisms differ across countries, requiring tailored strategies to safeguard your assets. Of note, Vietnam is a member of multiple international treaties and is looking to align further with global IP standards.
• First-to-File Trademark Systems: Many jurisdictions operate on a first-to-file basis, leaving brands vulnerable to counterfeiting or cybersquatting if trademarks are not registered promptly.
• Data Protection Variability: Data protection laws vary widely in scope, obligations, and penalties for breaches, creating compliance challenges for businesses operating in new countries.

Best practice:

• Secure IP rights by registering trademarks, patents, and copyrights in each jurisdiction where you operate.
• Use robust confidentiality agreements to protect trade secrets.
• Consider recording IP rights with customs authorities to prevent infringements. It is worth noting that some countries, including South Korea, boast strong IP enforcement mechanisms and have introduced effective specialized IP courts.
• Understand that the IP risk profile will differ by country and adjust your strategy accordingly.
• Implement systems to comply with local data protection laws and avoid penalties.
• Engage legal advisors to navigate the complexities of IP and data protection laws in each jurisdiction.

What Processes are Available for Dispute Resolution and Enforcement of Legal Rights?

What to assess: dispute resolution processes available and how enforcement of arbitral awards and judgments works in relevant jurisdictions.

Disputes can arise at any stage of a cross-border supply chain, whether over contracts, customs compliance, or regulatory enforcement. Key challenges include:

• Litigation Barriers: Resolving disputes through local courts can be slow, public, and complex. Issues such as unenforceable foreign judgments, language barriers, and perceptions of bias against foreign parties can further complicate matters.
• Escalating Risk: Without timely legal advice, businesses may struggle to mitigate risks before they escalate or to effectively address issues when they arise, potentially impacting both operations and reputation.

A well-known example of litigation involving an unclear dispute resolution clause is the case of  Compagnie Tunisienne de Navigation SA v Compagnie d’Armement Maritime SA [1971] AC 572.  In this case, a dispute arose between the parties over a shipping agreement which contained conflicting provisions about the governing law and jurisdiction.  One clause suggested that disputes would be resolved under French law, while another implied English law might apply.  This ambiguity led to significant delays and costs as the parties litigated over which jurisdiction and legal system should govern the dispute before addressing the substantive issues. 

Best practice:

• Consider including arbitration clauses in cross-border contracts, as arbitration awards are enforceable under the New York Convention, offering a more predictable and neutral resolution process.
• Draft clear dispute clauses in contracts that are tailored to the specific risks of each jurisdiction.
• Consult legal advisors to navigate jurisdiction-specific challenges and position your business for successful dispute resolution.

By proactively addressing dispute risks and implementing robust contractual safeguards, businesses can protect their interests, maintain operational continuity, and safeguard their reputation in global markets.

Expand into New Markets with Confidence

For many mid-sized manufacturers, global expansion isn’t just a growth strategy — it’s becoming a requirement to stay competitive. But entering a new market without the right preparation can lead to costly mistakes that delay progress or undermine the business case altogether.

Whether you’re weighing a move to India, Vietnam, Mexico, or another market, success depends on more than cost analysis. It requires a clear understanding of local logistics infrastructure and legal frameworks, regulatory obligations, and the day-to-day realities of running operations on the ground. Tariff impacts, transit times, customs procedures, labor laws, tax exposure, and supplier availability all carry weight — and overlooking any one of them can put your expansion plans at risk.

This guide offers a foundation for asking the right questions and identifying critical areas to address before you make a move. When logistics and legal planning are aligned, companies gain the clarity needed to act decisively and reduce the friction of entering new markets.

ABOUT DIMERCO EXPRESS GROUP

Dimerco Express Group integrates air and ocean freight, trade compliance, and contract logistics services to make global supply chains more effective and efficient. The majority of the company’s global logistics projects connect Asia’s logistics and manufacturing hubs with each other, and with North America and Europe. Dimerco serves customers from 150+ Dimerco offices, 80 contract logistics operations, and 200+ strategic partner agents throughout China, India, Asia Pacific, North America, and Europe.

ABOUT ADDLESHAW GODDARD

Addleshaw Goddard is a London headquartered, international, full-service law firm that consistently delivers high-quality outcomes for our clients globally. Addleshaw Goddard has offices around the world and has a market leading disputes practice – it is also able to utilize local law firm expertise firms via the AG Global Connect network, to ensure that businesses get the right advice. We have been advising clients for 250 years, and today we support over 5000 of the world’s most respected organizations from our 21 offices in Asia, Europe, and the Middle East. We help them in over 50 areas of business law, across more than 100 countries.

This document is for general information only and is correct as at the publication date. It is not legal advice, and Dimerco and Addleshaw Goddard assume no duty of care or liability as to any party in respect of its content. Addleshaw Goddard is an international legal practice carried on by Addleshaw Goddard LLP and its affiliated undertakings.